Investment Rating - The investment rating for the AIDC power equipment and grid industry is "Outperform the Market" (maintained) [2] Core Viewpoints - The AIDC power equipment sector is experiencing a technological transformation in power distribution methods, with smart meter tenders expected to recover from a low point [5] - The global data center's AI computing load is projected to grow significantly, with estimates of 9.7GW, 15.9GW, and 20.2GW for the years 2025-2027, representing a CAGR of 54% [5][17] - The domestic data center industry is expected to see substantial capital expenditure growth in 2025, marking it as a pivotal year for AIDC construction [5] Summary by Sections AIDC Power Equipment - Companies like VRT and NVTS are collaborating with Nvidia to develop next-generation 800V HVDC architectures, which are anticipated to become mainstream in AI data center power systems [5] - The AIDC power equipment market is expected to benefit from the increasing demand for power supply systems, with key recommendations including Hewei Electric and Shenghong Co. [5] - The market space for transformers, switchgear, UPS, and traditional HVDC is projected to reach 75 billion, 298 billion, 287 billion, and 17 billion yuan respectively by 2026 [17] Grid - The investment in national power engineering reached 611 billion yuan in April 2025, a year-on-year increase of 11.8% [36] - The national grid engineering investment for April 2025 was 452 billion yuan, showing a year-on-year decrease of 2.4% [36] - The grid sector is expected to maintain high investment levels during the 14th Five-Year Plan period, with annual investments estimated to exceed 700 billion yuan [5] Industry News - The domestic IDC investment is on the rise, with significant projects like the Southern Energy Big Data Center in Guizhou Province, which has a total investment of approximately 1.45 billion yuan [8] - Major cloud service providers are expected to continue increasing their capital expenditures, with Tencent and Alibaba planning substantial investments in AI computing infrastructure [23][28]

Investment Rating - The report maintains an "Outperform" rating for the wind power industry [1] Core Views - The offshore wind sector is expected to see significant project launches in the first half of 2025, with over 25GW of approved projects awaiting bidding, marking 2025 as a record year for tenders. The average annual installation of offshore wind capacity is projected to exceed 20GW during the 14th Five-Year Plan period, significantly higher than the previous plan [4][11] - Onshore wind installations are anticipated to surpass 90GW in 2025, achieving a historical high, with stable main unit prices and cost reductions driving a rebound in profitability. The export of Chinese wind turbines is gaining momentum, with high growth in orders expected from 2025 to 2026 [4] - The profitability of components has been declining from 2022 to 2024, but a recovery is expected in 2025 [4] Summary by Sections Industry News - Recent bidding activities indicate a robust pipeline for both offshore and onshore wind projects, with significant investments planned in Guangdong and Jiangsu provinces [10] Market Performance - The wind power sector has experienced a general decline over the past two weeks, with the largest drops seen in casting and forging components, as well as complete machines and bearings [3][45] Investment Recommendations - The report suggests focusing on four key areas: 1) Leading companies in tower/pile production with high export potential 2) Leading submarine cable companies with expected recovery and opening export markets 3) Leading complete machine manufacturers with domestic profitability bottoming out and accelerating exports 4) Component manufacturers with opportunities for simultaneous volume and profit growth in 2025 - Recommended companies include Goldwind Technology, Oriental Cable, and others [5] Bidding and Installation Data - As of 2025, the cumulative public bidding capacity for wind turbines nationwide reached 48.8GW, with a year-on-year increase of 78%. The average winning bid price for onshore wind turbines (excluding towers) in 2025 is 1,720 RMB/kW [7][11] - In April 2025, China added 5.34GW of new wind power capacity, a year-on-year increase of 299%, bringing the total installed capacity to 541.19GW, accounting for 15.5% of total power generation capacity [7][40] Material Prices - Recent trends show a decline in the prices of black materials, with fiberglass and epoxy resin prices remaining stable [7][41]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][28][31] Core Views - The company is experiencing a short-term revenue decline due to storage price impacts, with a revenue of 1Q25 at 1.543 billion yuan, down 10.62% YoY and 7.58% QoQ. However, a gradual recovery in storage prices is expected in 2Q25, which may lead to performance improvement [1][20][28] - Embedded storage revenue for 2024 reached 4.241 billion yuan, a significant increase of 151.68% YoY, with products entering major client supply chains. AI-related products are also seeing rapid revenue growth, particularly in AI glasses, which are expected to grow over 500% YoY in 2025 [2][28] - The company is making steady progress in wafer-level advanced packaging, which is anticipated to drive long-term growth. The enterprise-level and automotive-grade storage segments are also expanding successfully [3][28] Summary by Sections Financial Performance - 1Q25 revenue was 1.543 billion yuan, with a net profit of -216 million yuan, reflecting a significant decline in profitability due to increased R&D expenses and inventory write-downs [1][28] - The company forecasts a gradual recovery in revenue, with expected net profits of 178 million yuan, 200 million yuan, and 382 million yuan for 2025, 2026, and 2027 respectively [28][29] Revenue Breakdown - Embedded storage is projected to generate revenues of 5.439 billion yuan, 6.459 billion yuan, and 7.363 billion yuan from 2025 to 2027 [28] - PC storage revenue is expected to be 2.206 billion yuan, 2.283 billion yuan, and 2.363 billion yuan for the same period [28] - Automotive-grade storage revenue is anticipated to grow to 155 million yuan, 294 million yuan, and 418 million yuan from 2025 to 2027 [28] Market Trends - The global storage market is experiencing a cyclical downturn, with NAND Flash prices expected to stabilize in 2Q25 after a decline in 1Q25. The company is well-positioned to benefit from this recovery [20][24] - The demand for AI-related storage products is increasing, particularly in the context of AI glasses and high-performance PC storage solutions [2][3][28]

Group 1: Overseas ESG Highlights - La Banque Postale launched an ESG-based tiered savings product to promote responsible investment[3] - Snam successfully issued $2 billion in multi-tranche sustainable development-linked bonds, marking a significant milestone in sustainable finance[3] - 87% of institutional investors in a BNP Paribas 2025 ESG survey reported that their sustainability goals remain unchanged, with 85% incorporating sustainability criteria into investment decisions[3] Group 2: Domestic ESG Developments - The China Securities Regulatory Commission approved the registration of aluminum alloy futures and options on the Shanghai Futures Exchange, marking the first recycled metal variety in China's futures market[3] - A hydrogen industry venture capital fund initiated by Sinopec has a first-phase scale of 5 billion yuan, emphasizing the growth of green finance in China[3] - The national carbon market now covers the steel, cement, and aluminum smelting industries, making it the largest carbon market globally[3] Group 3: Policy and Regulatory Changes - The EU has granted a three-year compliance period for car manufacturers to meet carbon dioxide emission targets, reflecting a shift in regulatory approach[3] - The State Council of China issued guidelines to improve the market-oriented allocation of resource and environmental factors by 2027, including carbon trading systems[3] - The EU Ombudsman is investigating the European Commission's process for relaxing sustainability reporting and due diligence requirements, indicating ongoing scrutiny of corporate sustainability practices[3]

Group 1: Overseas ESG Highlights - The report highlights significant overseas ESG events focusing on green finance product innovation, corporate emission reduction actions, and policy adjustments aimed at addressing climate change and promoting sustainable development. Notable developments include La Banque Postale launching ESG-based layered savings products and Snam successfully issuing $2 billion in multi-tranche sustainable development-linked bonds [3][7]. - In carbon neutrality and emission reduction, Japan has initiated offshore blue carbon research to explore the use of marine plants for carbon absorption and storage. Schneider Electric has launched a low-carbon building project in Dubai, expected to reduce energy use by 37% and CO2 emissions by 572 tons [3][7]. - The report also notes that 87% of institutional investors maintain their sustainability goals, and 85% incorporate sustainability standards into their investment decisions, according to a 2025 ESG survey by BNP Paribas [3][7]. Group 2: Domestic ESG Highlights - In China, the focus is on green finance innovation, carbon market expansion, and policy promotion, emphasizing market-oriented resource and environmental factor allocation. The China Securities Regulatory Commission has approved the registration of aluminum alloy futures and options on the Shanghai Futures Exchange, marking the first recycled metal variety in the futures market [3][7]. - The national carbon market has expanded to include the steel, cement, and aluminum smelting industries, making it the largest carbon market globally. Additionally, the first voluntary greenhouse gas emission reduction afforestation project in Guangxi has been approved [3][7]. - The report mentions that the State Council has issued opinions on improving the market-oriented allocation system for resource and environmental factors, aiming to enhance carbon emission rights and water rights trading systems by 2027 [3][7]. Group 3: Academic Frontiers - A study published in 2025 in the "Finance Research Letters" analyzed data from over 40 European banks from 2006 to 2022, finding significant impacts of environmental and climate pressures on bank profitability [3][5]. - Another study in the "Journal of Financial Markets" examined ESG scores and portfolio performance in South Africa from 2010 to 2020, revealing a significant influence of ESG ratings on investment performance [3][5]. - Research published in the "Journal of Corporate Finance" analyzed the effects of carbon neutrality policies on stock price crash risk in China from 2018 to 2021, indicating a significant impact of these policies on stock price stability [3][5].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][28][31] Core Views - The company is experiencing a short-term revenue decline due to storage price impacts, with a revenue of 1Q25 at 1.543 billion yuan, down 10.62% YoY and 7.58% QoQ. However, a gradual recovery in storage prices is expected in 2Q25, which may lead to performance improvement [1][20][28] - Embedded storage revenue for 2024 reached 4.241 billion yuan, a significant increase of 151.68% YoY, with products entering major client supply chains. AI-related products are also seeing rapid revenue growth, particularly in AI glasses, which are expected to grow over 500% YoY in 2025 [2][28] - The company is making progress in enterprise-level and automotive-grade storage, with advanced wafer-level packaging expected to drive long-term growth. The company has passed various tests and is set to meet advanced storage packaging demands [3][28] Summary by Sections Financial Performance - 1Q25 revenue was 1.543 billion yuan, with a net profit of -216 million yuan, reflecting a significant decline in profitability due to increased R&D expenses and inventory write-downs [1][28] - Revenue projections for 2025-2027 are 1.78 billion, 2.00 billion, and 3.82 billion yuan respectively, with corresponding PE ratios of 156, 139, and 73 [3][28] Revenue Breakdown - Embedded storage is projected to generate revenues of 5.439 billion, 6.459 billion, and 7.363 billion yuan from 2025 to 2027, driven by a recovery in storage prices and increased shipments [28] - PC storage revenue is expected to be 2.206 billion, 2.283 billion, and 2.363 billion yuan for the same period, benefiting from a gradual market recovery [25][28] - Automotive-grade storage is anticipated to grow to 1.55 billion, 2.94 billion, and 4.18 billion yuan from 2025 to 2027, as customer adoption increases [26][28] Market Trends - The global storage market is experiencing a cyclical downturn, with NAND Flash prices expected to stabilize in 2Q25 after a decline in 1Q25. The company anticipates a recovery in prices due to inventory adjustments and increased demand from OEMs [20][24][28] - The company is well-positioned in the supply chains of major clients across various sectors, including AI, automotive, and consumer electronics, which supports its growth outlook [2][3][28]

Economic Growth Indicators - The Guosen High-Frequency Macro Diffusion Index A remains negative, while Index B continues to decline, indicating weak economic growth momentum[1] - Investment sector sentiment has decreased, while consumption and real estate sectors remain stable[1] - Seasonal analysis shows Index B typically rises by an average of 0.17 weekly after the Spring Festival, but this week it standardized to a decline of 0.43, underperforming historical averages[1] Price Trends - Food prices have increased, while non-food prices have decreased; May CPI food prices are expected to be around -1.0% month-on-month, non-food prices at -0.2%, and overall CPI at -0.4%[2] - The Producer Price Index (PPI) is projected to decline to -3.1% year-on-year, with a month-on-month expectation of -0.2%[2] Asset Price Predictions - Current domestic interest rates are low, and the Shanghai Composite Index is high; predictions indicate a rise in the ten-year government bond yield and a decline in the Shanghai Composite Index for the week of June 6, 2025[1][19] - The predicted ten-year government bond yield for the week of June 6 is 2.24%, with the Shanghai Composite Index expected to be 3,101.65[20]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The equity market is expected to continue the pattern of index fluctuations and internal theme rotation, waiting for the progress of the technology industry to drive a new round of technology market upward. The bond market interest rate remains low, meaning the opportunity cost of convertible bonds is extremely low, and the potential allocation power of convertible bonds is abundant. If a large - balance convertible bond is downgraded in rating, it may be a good opportunity to increase positions in convertible bonds. In the stage of strong macro - uncertainty, the inconsistency of driving factors between the dividend and technology sectors can be used to reduce portfolio fluctuations, and targets supported by performance or (and) valuation drivers can be sought [2][18]. 3. Summary by Relevant Catalogs Market Trends (2025/5/26 - 2025/5/30) - **Stock Market**: The equity market fluctuated and closed down last week. The market hotspots rotated rapidly. The automobile sector adjusted significantly. The Shenwan primary industries showed more gains than losses, with environmental protection (+3.42%), medicine and biology (+2.21%), national defense and military industry (+2.13%), agriculture, forestry, animal husbandry and fishery (+1.79%), and computer (+1.77%) leading the gains, while the automobile (-4.11%), power equipment (-2.44%), non - ferrous metals (-2.40%), and comprehensive (-1.94%) sectors lagged behind [7][8]. - **Bond Market**: The bond market performance was differentiated. The 10 - year treasury bond interest rate closed at 1.67% on Friday, down 4.96bp from the previous week, while the 10 - year CDB bond interest rate rose slightly by 0.56bp [8]. - **Convertible Bond Market**: About half of the convertible bond individual bonds closed up. The CSI Convertible Bond Index rose 0.23% for the whole week, the median price rose 0.02%, the calculated arithmetic average parity rose 1.12% for the whole week, and the whole - market conversion premium rate decreased by 1.08% compared with the previous week. Most industries in the convertible bond market closed up, with media (+2.72%), building materials (+1.84%), banks (+1.82%), and beauty care (+1.72%) leading the gains, while household appliances (-2.42%), communication (-1.51%), automobile (-1.38%), and social services (-1.26%) lagged behind. The total turnover of the convertible bond market last week was 277.083 billion yuan, with an average daily turnover of 55.417 billion yuan, basically the same as the previous week [8][11][15]. Views and Strategies (2025/6/3 - 2025/6/6) - **Equity Market Outlook**: The equity market is expected to continue the pattern of index fluctuations and internal theme rotation, waiting for the progress of the technology industry to drive a new round of technology market upward [2][18]. - **Bond Market Outlook**: After the implementation of reserve requirement ratio cuts and interest rate cuts, the interest rate has not broken through the previous low, but the credit spread has significantly narrowed. Under the subsequent dominance of allocation power, the interest rate is difficult to rise or fall significantly [2][18]. - **Convertible Bond Investment Strategy**: If a large - balance convertible bond is downgraded in rating, it may be a good opportunity to increase positions in convertible bonds. In the stage of strong macro - uncertainty, the following three types of targets can be considered: - **Performance - Driven**: High - frequency data products, industries with excellent first - quarter performance, and stocks whose performance is driven by large customers [18]. - **Event - Catalyzed**: Industries affected by geopolitical conflicts, overseas technology blockades, innovation drug BD authorizations, and supply - side constraints [18]. - **Dividend and Defensive**: High - dividend assets and the power industry in the peak summer electricity consumption season [18]. Valuation Overview - As of May 30, 2025, the average conversion premium rates of convertible bonds in different price ranges of equity - biased convertible bonds are at different percentile levels since 2010 and 2021. The average YTM of debt - biased convertible bonds with a parity below 70 yuan is at the 15%/7% percentile level since 2010/2021. The average implied volatility of all convertible bonds is at the 50%/25% percentile level since 2010/2021, and the difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stock is at the 10%/15% percentile level since 2010/2021 [19]. Primary Market Tracking - **Last Week (2025/5/26 - 2025/5/30)**: The Hengshuai Convertible Bond was issued, and no convertible bonds were listed. As of now, there are 85 convertible bonds to be issued, with a total scale of 131.39 billion yuan, including 10 that have been approved for registration, with a total scale of 15.89 billion yuan, and 4 that have passed the listing committee, with a total scale of 3.23 billion yuan [28][29]. - **Next Week (2025/6/3 - 2025/6/6)**: As of the announcement on May 30, there are no convertible bonds announced for issuance or listing [29].

Report Summary 1. Report Industry Investment Rating - No industry investment rating is provided in the report. 2. Core View - The report regularly tracks the latest private exchangeable bond (private EB) projects from public channels, including basic elements such as project status, scale, and underlying stocks. It also reminds that the issuance terms and progress may change, and the final prospectus and relevant underwriters should be referred to [1]. 3. Summary by Related Catalogs New Projects This Week - Chongqing Xiaokang Holding Co., Ltd.'s 2025 private placement of science - innovation exchangeable corporate bonds for professional investors received exchange feedback, with a proposed issuance scale of 3 billion yuan and the underlying stock being Seres (601127.SH), and the exchange update date was May 29, 2025 [2]. - Guangdong Shengyi Technology Co., Ltd.'s 2025 private placement of exchangeable corporate bonds for professional investors was accepted by the exchange, with a proposed issuance scale of 2 billion yuan and the underlying stocks being Shengyi Electronics/Lianrui New Materials (688183.SH/688300.SH), and the exchange update date was May 28, 2025 [2]. Project Status Table - Multiple private exchangeable bond projects have passed the review, including those of Shudao Investment Group Co., Ltd., China Pingmei Shenma Group Co., Ltd., etc. Some projects are in the feedback stage, such as those of Chongqing Xiaokang Holding Co., Ltd., Jiangsu Shenghong Technology Co., Ltd., etc. And the project of Guangdong Shengyi Technology Co., Ltd. is in the acceptance stage [3].

- The report does not contain any specific quantitative models or factors related to construction, testing, or evaluation[4][6][8] - The report primarily focuses on market performance, fund issuance, and industry trends without delving into quantitative investment strategies or factor analysis[4][6][8] - No formulas, quantitative factor construction processes, or model evaluations are provided in the report[4][6][8]